ARTICLE 2 The President of the State Audit Institution shall issue Implementing Regulations of the attached Law and until such Regulations are issued the provisions of the current applicable Regulations and Decisions shall continue to be in force, provided they are not in conflict with the provisions of the attached Law.

ARTICLE 3 The President of the Institution shall issue Regulations governing the affairs of the Members and Employees and their financial benefits. Pending the issuance of such Regulations, the provisions of the currently applicable Regulations shall continue to be in force provided they are not in conflict with the provisions of the attached Law.

ARTICLE 4 The provisions of Pension and End of Service Benefits Law applicable to employees of the Diwan of Royal Court shall apply to the Members and Employees of the Institution.

ARTICLE 5 Royal Decree No. 129/91 on State Audit Law and any provisions, which conflict, with the provisions of the attached Law are hereby repealed.

ARTICLE 6 This Decree shall be published in the Official Gazette and shall come into force from the date of its publication.

QABOOS BIN SAID
SULTAN OF OMAN

Issued on:
10 Rabi`a Al Akher 1421 Hijri
Corresponding to 12 July 2000

STATE AUDIT LAW

Section One
Definitions

ARTICLE 1 The terms used in this Law, shall, unless otherwise specified by the context, have the meanings ascribed to them hereunder:

a) Institution	State Audit Institution
b) President	President of State Audit Institution
c) Deputy President	Deputy President of State Audit Institution
d) Regulations	Regulations and decisions issued in implementation of the provisions of the State Audit Law
e) External Auditors	Registered Auditors and Accountants who practice their profession in accordance with the law regulating the accounting and auditing professions in the Sultanate.
f) Members	Technical staff in the Institution
g) Employees	Administrative staff in the Institution

Section Two
THE STATE AUDIT INSTITUTION AND ITS OBJECTIVES

ARTICLE 2 The State Audit Institution is an autonomous legal entity and shall enjoy financial, administrative and operational independence.

ARTICLE 3 The Institution shall carry out post audits of the State public funds in addition to monitoring the performance of entities falling under its auditing jurisdiction in the field of services and works in accordance with the rules stipulated in this Law and its Regulations.

ARTICLE 4 The objectives of the Institution shall be as follows:

a) To protect the State public funds and provide assurance with regards to and appropriateness of manual as well as Information Technology based internal controls systems, procedures and their conformity with the laws, financial regulations and provisions relating to personnel systems.

b) To expose cases of financial irregularities in the entities subject to this Law.

c) To draw attention to any deficiencies or weaknesses in the financial and personnel laws, rules and regulations in force and recommend means of redressing them.

d) To evaluate the performance of entities subject to this Law and ensure that the resources are employed economically, efficiently and effectively.

Section Three
CONSTITUTION OF THE INSTITUTION

ARTICLE 5 The Institution shall consist of a President, Deputy President and an adequate number of Members and Employees.

ARTICLE 6 The President and the Deputy President shall be appointed by Royal Decree. Members and Employees shall be appointed by a decision of the President. Their grades, salaries and increments shall be in accordance with the two Schedules appended hereto. The said schedules shall be amended by Royal Decree or Royal Order whenever a decision is made to increase salaries in the State. Such increase shall be in the same proportion and shall apply from the effective date thereof.

ARTICLE 7 The President shall be responsible for supervising the Institution’s affairs, laying down its policy and monitoring the implementation thereof. In his absence, the Deputy President shall take his place. The President may delegate some of his powers to the Deputy President or any person he deems fit.

ARTICLE 8 The Institution shall prepare its financial statements on an accrual basis. These accounts shall be audited by the Institution itself.

ARTICLE 9 It shall be unlawful for the Deputy President, Members and Employees to engage in the following:

(a) Serve as chairman or member on the board of any public authority, establishment or company;

(b) Combine his employment with the Institution and employment with any administrative body of the State or any other employment which would be in conflict with their duties;

(c) Carry on any business or professional activities;

(d) Accept any gifts or remuneration, whether in cash or in kind, from bodies, which are audited by the Institution.

ARTICLE 10 The Deputy President, Members and employees of the Institution shall, upon being appointed, at five year intervals thereafter and upon leaving their employment, make a declaration listing the details and sources of their moveable and immovable property whether held in their own name or that of a family member including spouse/s and minor children. Such statements shall be kept confidential and access to them shall not be granted without the President’s approval.

ARTICLE 11 It shall be forbidden for the Deputy President, Members and Employees to divulge any information to which they may have had access to by virtue of their work, or pass on such information or allow unauthorised persons access to such information. This prohibition shall remain in force even after the termination of service.

Section Four
ENTITIES SUBJECT TO AUDIT BY THE INSTITUTION

ARTICLE 12 The following entities shall be subject to audit by the Institution:

(a)     All entities which make up the Administrative Apparatus of the State, autonomous Government Entities and Departments whose budgets are included in the General State Budget unless specifically exempted by the decree under which such entities were set up;

b)     Public Authorities and Establishments and other public entities.

c)     Pension Funds, Private Bodies and Establishments in the Sultanate which are guaranteed or subsidised by the government or any entity subject to the audit of the Institution.

d)     Companies conducting business activities in the Sultanate, if they are wholly owned by the Government; or if the Government owns at least 51% of the share capital; or to which the Government has granted a concession for a public utility or a natural resource, without prejudice to any special provisions prescribed in the laws or Royal Decrees issued in respect of such companies or any agreements entered into by the Government in the implementation thereof.

The Institution’s right to audit shall not prejudice the right of such companies to have their own auditors appointed by their general bodies in accordance with the provisions of the Commercial Companies Law.

Section Five
FUNCTIONS

ARTICLE 13 The Institution shall carry out the following audits:

(a) Financial and Regularity audit covering accounting and legal aspects.

(b) Performance audit and the review of the implementation of the plan.

(c) Review of decisions issued in connection with the financial contraventions.

In undertaking its functions, the Institution shall carry out the following:

1. Audit accounts, in respect of both income and expenditure, disbursement and receipt records whether these are maintained manually or electronically and to verify whether financial dealings have been conducted in accordance with the financial laws and regulations in force including the review of adjustment accounts and verify that all items are supported by appropriate documents;

2. To examine decisions related to personnel matters and end of service benefits to ensure that these decisions are in compliance with the budget, laws, regulations and financial systems;

3. To examine the activities of stores, workshops, plants, farms and similar activities;

4. To review loans, advances, investments and credit facilities;

5. To audit the final accounts after the financial year end, of all entities that are subject to audit by the Institution and the State Annual Account and submit to the Ministry of Finance its opinion and recommendations for any necessary corrective adjustments before the accounts are presented to the Financial Affairs Council, prior to their submission to His Majesty the Sultan;

6. To follow up the implementation of the Development Plan Projects and to evaluate the performance of the Administrative and Economic entities against the budget and ensure that such expenditures are incurred within the time-scale and in the manner prescribed by the Development Plan. In addition, the Institution shall also follow up and evaluate the results of these entities and ensure that the resources were used economically, efficiently and effectively.

ARTICLE 14 In the discharge of its responsibilities, the Institution may seek the assistance of experts and professionals from other government entities or professional firms, if necessary, and determine and pay fees for such services rendered in accordance with the terms prescribed in the Regulation

ARTICLE 15 The Institution shall examine records, accounts, supporting documents, computerised accounts and electronic data either at the premises of the entity concerned or at premises of the Institution.

The Institution has the right to review any document, register or any minutes of meetings of any committee, Board of Directors or any other documents, it deems necessary for the proper and complete execution of its duties. Audits shall be carried out without any prior notice.

ARTICLE 16 The auditing of accounts of entities specified in Article 12 (b); (c) and (d) shall be carried within the parameters of the International Accounting Standards and accepted Accounting Principles and the entities’ related financial regulations.

ARTICLE 17 The Institution may delegate the auditing of accounts of entities specified in Article 12 (b) and (c) to external auditors and determine the scope of such audit. The audited entity shall bear the fees of such audits. Such Auditors shall submit their audit reports to the Institution for its comments prior to forwarding the reports to the relevant entities.

ARTICLE 18 The results of the audits together with any recommendations on remedial action to be taken in respect of contraventions of financial laws, rules and regulations shall be communicated to the entity concerned.

The entity concerned shall respond to the observations and correspondence of the Institution within two months from the date of notification.

The President shall submit to His Majesty, The Sultan issues of special significance, which the entities subject to this Law fail to implement.

The President shall submit to the Council of Ministers, as and when deemed necessary, a report on issues to which the audited entities have failed to implement and to the Civil Service Council a report on personnel issues, which the entities concerned have failed to implement.

Section Six
ANNUAL REPORTS

ARTICLE 19 The Institution shall submit an annual report on its work, which will include the following:

a) Contraventions discovered in the entities subject to this Law and its opinion on the action taken with regard to such contraventions and the penalties imposed;

b) The Institution’s observations on the State Annual Account and the Ministries’ and other Government entities’ Annual Accounts.

c) The Institution’s observations on the financial statements of public authorities, establishments and companies

d) A general evaluation of the performance of the audited entities subject to audit by the Institution and implementation of the development projects.

e) Observations on the adequacy of financial laws and regulations, records, systems and forms in use and competence of the financial staff.

f) Any other matters arising from audit operations during the financial year ended.

ARTICLE 20 The President shall submit the annual report referred to in Article (19) to His Majesty the Sultan before the end of the subsequent financial year. The President shall also submit to the Council of Ministers an annual report on any difficulties encountered by the Institution in the course of performing its duties together with the recommendations related thereto.

Section Seven
FINANCIAL CONTRAVENTIONS

ARTICLE 21 The following shall be considered financial contraventions:

(a) Non-compliance with the provisions of financial laws, rules and regulations in force in the State;

(b) Failure to allow members of the Institution to review papers, documents, records and other instruments to which they are entitled access to in accordance with the law or to provide false information to them;

(c) Every act, whether deliberate or as a result of negligence leading to illegitimate disbursal of funds or loss of a financial right, or damage inflicted upon the entities subject to this law, or resulting or causing to result in delay in the implementation of development projects;

(d) Exploitation by any official working in the Government or a parastatal organisation, of his position or influence in order to obtain personal benefit whether for himself or for another;

(e) Failure to respond or delay in responding to observations of, or correspondence from the Institution without valid justification. A reply involving procrastination or postponement shall be deemed as a failure to respond.

ARTICLE 22 Upon the discovery of a financial contravention, the President shall request the head of the entity concerned to conduct the necessary investigation against the official responsible for the contravention. 14 The entity shall comply with the request upon notification. The head of the entity shall, if the contravention constitutes a criminal offence, inform the relevant security or judicial authority to take up the investigation and will inform the Institution accordingly.

ARTICLE 23 All those subject to this Law must, without prejudice to any other action incumbent upon them, notify the Institution within one week of any financial contravention or the occurrence of any incident, which results in financial loss to the State.

ARTICLE 24 Entities subject to this Law shall provide the Institution with investigation papers carried out on any financial contravention whether these are detected by the Institution or by the entity. In addition, the Institution shall be notified with the decisions issued as a result of such investigation, within thirty days from the issuance of such decisions. The Institution shall give its opinion on such documents and decisions within a maximum period of two months from being notified thereof. The Institution shall return the documents and papers to the concerned entity for necessary action.

ARTICLE 25 The investigation of the financial contraventions and the imposition of penalties shall be in accordance with the disciplinary provisions set forth in the Civil Service Law and its Implementing Regulations. With regards to entities governed by the provisions of specific laws, rules and regulations, the investigation of financial contraventions and the imposition of penalties shall be subject to the disciplinary provisions applicable to such entities.

ARTICLE 26 A disciplinary action, in respect of a financial contravention relating to an employee who is still in service, shall be time-barred after the expiry of five years from the date of detection of the contravention. Correspondence by the Institution shall discontinue the limitation period.

Section Eight
FINANCIAL LAWS AND REGULATIONS

ARTICLE 27 The entities subject to this Law shall provide the Ministry of Finance draft proposals of rules and regulations prepared by such entities in connection with financial and accounting affairs, tax, duties, and fees for its opinion before forwarding these drafts to the Institution for comments.

ARTICLE 28 While requesting for interpretations of this Law, the entities, which are subject to this Law, shall ensure that such a request is accompanied with the opinion of the Institution on the subject matter.

NOTE: This is a translation of the Arabic text of the Law. Only the Arabic Version is legally binding.